International Journal of Economics, Commerce and Management

United Kingdom Vol. IV, Issue 10, October 2016

http://ijecm.co.uk/ ISSN 2348 0386

INFLUENCE OF STRATEGIC DECISION MAKING

PRACTICES ON PERFORMANCE OF CONSTRUCTION
FIRMS IN NAKURU TOWN, KENYA

J. M. Murage
School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya
muragemuthee2016@gmail.com

B. Okello
School of Business, Jomo Kenyatta University of Agriculture and Technology, Kenya

Abstract
There is scant literature on strategic decision making and firm performance and more so among
construction firms. Therefore, the main objective of this study was to evaluate the influence of
strategic decision making practices (specifically, advocacy and dialogic decision making) on
performance of construction firms in Nakuru town. Survey research design was adopted. The
study targeted the 936 management and supervisory staff of 312 construction firms that are duly
registered and active in Nakuru town out of which 65 respondents were selected randomly. The
study used self-administered questionnaires to collect data. Data were analyzed using descriptive
and inferential statistics with the aid of SPSS. The study found that strategic decision making
practices influenced performance of construction firms significantly. Also, dialogic decision making
practices were found to significantly influence the said performance. However, the study found
that advocacy decision making practices did not significantly influence performance. The study
concluded that construction firms in Nakuru town used advocacy decision making where the firm
pushed through with a decision regardless of the outcome. Dialogic decision making practices
ensured that proposals are scrutinized by all decision makers. The study recommended that
where construction firms use advocacy decision making where a single option is selected, the
option should be analyzed by all decision makers and stakeholders in order to assess its viability.

Keywords: Advocacy decision making practices, construction firms, dialogic decision making
practices, firm performance, strategic decision making practices

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INTRODUCTION
The competitive advantage of an organization in a global economy depends primarily on the
quality of the decisions made by the management of these organizations in relation to their
development. The increasing complexity, turbulence and uncertainty of the environment require
different and greater knowledge (Batley & Daly, 2006). Increased consumer demands require
new solutions, knowledge and enhanced decision making.
Due to increasing competition, the organization is required to constantly revise its
product and service mix and managerial methods to increase productivity (Batley & Daly,
2006Modern conditions of dynamic competition, sophisticated information technology,
knowledge economy, market globalization, have changed the relation to importance of decision
making in organizations. Evidently then, strategic decision making will play a critical role in the
performance of the organization. Of course, financial, technological, and other material
resources are undoubtedly also critical to the organization‟s success in any competitive market.
According to a report published by Price-Waterhouse Coopers (2013), world construction
markets are at a tipping point already with 52% of all construction activity in emerging markets
today. This is expected to increase to 63% by 2025, with China and India contributing most to
growth in emerging markets. China overtook the US to become the world's largest construction
market in 2010, and is expected to increase its global share from 18% today to 26% in 2025,
despite an expected slowdown. A report published by EC Harris Research (2013), states that
the UK construction industry has turned around to become one of the fastest growing sectors in
the economy. It further elaborates that the changes in the international economy are creating
new opportunities for Britain.
From a regional forefront, a report published by Deloitte, titled 'African Construction
Trends Report 2013' states that East Africa is fast becoming a leading African region and a
strategic hub of continental growth. Though historically one of the world‟s poorest and least
developed regions, it is fast tracking infrastructure development with countries such as Ethiopia
having shown annual growth of over 10% per annum in recent years (Deloitte, 2013). The report
further expounds the East African region is turning the heads of investors, construction firms
and multi-national corporations. As aggressive development gains momentum, investors will
rely on local governments to develop basic infrastructure such as rail, roads, healthcare
facilities, housing, real estate and retail space.
Closer to home, data from the Kenya National Bureau of Statistics shows that the
construction industry in Kenya emerged among the top performing sectors in the period
alongside financial services and transport and communication. The sector grew by 10.7%
compared to the dismal performance of 0.3% in the same period in 2010 and contributed

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Sh12.6 billion to the GDP in the period supported by massive road infrastructure projects
currently in progress across the country (KNBS, 2011).
Being “important, in terms of the actions taken, there sources committed, or the
precedents set” (Shubladze, Mgebrishvili &Tsotskolauri, 2008). Eisenhardt (1989) suggests they
involve strategic positioning; have high stakes; involve many of the firm‟s functions; and
considered representative of the process by which major decisions are made at the firm.
Eisenhardt and Zbaracki (1992) add that strategic decisions are “those in frequent decisions
made by the top leaders of an organization that critically affect organizational health and
survival”.
Characteristically, strategic decisions are long term, highly unstructured, complex, and
inherently risky and have great impact on the future of the organization. Strategic decisions are
those important decisions that typically require a large amount of organizational resources, and
firm„s environment consideration. In decisions, top management usually plays a central role, in
making the decisions (Hofer &Schendel, 2008). These decisions influence organizational
direction, administration, and structure (Christensen et al., 2002). Since decision not only affects
the organization in which they are taken but also the society (Colignon & Cray, 2000), it is not
surprising that decision-making process has been heavily researched (Amason, 2006). One
stream of these researches has focused on the decision-making process and factors influencing
the process. (Van Bruggen et al., 2008).
Decision-making is so important that none of the managerial functions can be performed
without it (Trewatha & Newport, 2012). They argued that for management purpose, decisions
are obviously required in planning, organizing, actuating and controlling. Plunkett and Attner
(2004) suggested that, decision-making is an important part of managers' job. A manager
makes decisions constantly while performing managerial functions. But none of his activities is
more important than making wise decision (Newman & Warren, 2007).

Statement of the Problem

Decisions can be costly or beneficial depending on the approach to the decision-making
process used and the quality of the decisions made. The gravity of decision-making increases
as one moves up the organization hierarchy. While the impact of erroneous decision making at
the lower levels of the firm are at times costly, the situation could be more pronounced even
catastrophic when the erroneous decision were made at a higher managerial level in the firm. In
other words, the propagation of error made at the higher levels of management is more severe
than at the lower levels of the firm. This then underscores the need to enhance decision making
practices at the firm. Whereas most definitions of a decision practices start with the detection of

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a problem, it is important to adopt a broader definition of the decision context, encompassing

elements that exist and evolve even when the situation does not present exceptional events.
However, for most organizations, the decision making practices are problem oriented rather
than objective or goal oriented. This puts them in a reactive situation rather than proactive which
often and limits the time and resources needed to solve the problems and also stifles strategic
operations. Therefore, most decision making approaches adopted by firms lack this strategic
element. However, there is scant literature on strategic decision making practices and firm
performance and more so among construction firms. Consequently, not much has been done to
evaluate the influence of strategic decision making practices on performance of construction
firms which usually operate on limited resources and fixed timelines to achieve their objectives.

General Research Objective

The general objective of the study was to evaluate the influence of strategic decision making
practices on performance of construction firms in Nakuru town, Kenya.

Specific Research Objectives

i. To examine how advocacy decision making practices influence performance of
construction firms in Nakuru town.
ii. To examine the influence of dialogic decision making practices on performance of
construction firms in Nakuru town.

Research Hypotheses
H01: Advocacy decision making practices do not significantly influence performance of
construction firms in Nakuru town.
H02: Dialogic decision making practices do not significantly influence performance of
construction firms in Nakuru town.

THEORETICAL REVIEW
The study was guided by two theories which include theory of planned behaviour and strategic
choice theory.
Theory of Planned Behavior
TRA originally assumed that most behaviours of interest are those where the person has the
resources, skills and opportunities to engage in their desired action. However, recognizing that
this is often not the case, Ajzen (1988) proposed an extension of TRA – the Theory of Planned
Behaviour (TPB). This added a further dimension to TRA – that of perceived control over the

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intended behaviour. Perceived behavioral control is influenced by internal factors (skills, ability,
information, emotions) and external factors (opportunity to engage in the behaviour and the
extent to which performing the behaviour depends on the cooperation of others). A person‟s
perceived behavioral control reflects his/her beliefs about factors that may inhibit or promote the
performance of the behaviour. Perceived behavioral control is posited to have a causal
influence on intentions, but actual behavioral control also has a direct influence on behaviour.
Meta-analyses of studies applying TPB conclude that it accounts for considerable proportions of
the variance in intentions across a range of behaviours (39-41 per cent) and a somewhat lower
proportion of variance in behaviour (27-34 per cent) (Armitage & Connor, 2001; de Wit &
Stroebe, 2004). TRA and TPB have been applied to a wide range of decisions about behaviours
(for example, dealing in stocks and shares, smoking initiation, shoplifting, condom use, oral
contraception, participation in exercise).
In line with the theory of planned behavior, managers of construction firms can employ
perceived behavioral control which is influenced by internal factors such as skills, ability,
information, emotions, and external factors like opportunity to engage in the behaviour and the
extent to which performing the behaviour depends on the cooperation of others in analyzing
views of stakeholders during decision making. The foregoing is bound to enable them come up
with decisions that would optimally be beneficial to the firm‟s performance.

Strategic Choice Theory

Strategic Choice Theory was developed when industrial relations in the U.S. were changing
rapidly. Because most of the popular theories at that time were generated during periods of
relative stability in U.S. industrial relations practice and consequently are overly static, they have
difficulty explaining behavior when the basic parameters of the system appear to be changing.
For example, Dunlop's systems model was widely accepted in 1960's and 1970's. But there are
some anomalies in the model. First, the model could not foresee the declines of union
membership after that time. Rather conventional models assume that labor unions were a
permanent participant in their employment relationships. Second, conventional models assume
that there is a consensus ideology. But based on the models, we could not tell whether or not
managerial values, strategies, and behavior in industrial relations were changed. Third, the
traditional industrial relations models treat management as reacting to union demands,
pressures, and initiatives. But there were many managerial initiatives and changes that affected
the transformation in U.S. industrial relations and they have occurred within management.
Therefore, they added a more dynamic component to industrial relations theory by developing
the concept of strategy, or strategic choice. Then they tried to demonstrate that industrial

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relations practices and outcomes are shaped by the interactions of environmental forces, union
leaders, workers, and public policy decision makers (Kochan et al., 1984).
Strategic Choice Theory starts with consideration of relevant forces in the external
environment that affects employment relationships. Changing external environment induce
employers to make adjustment in their competitive business strategies. In making these
adjustments, the range of options considered are filtered and constrained so as to be consistent
with the values, beliefs, and philosophies engrained in the mind of key decision-makers. As
choice are also embedded in particular historical and institutional structures, the range of
feasible options available at any given time is partially constrained by the outcomes of previous
organizational decisions and the current distribution of power within the firm and between it and
any unions, government agencies, or other external organizations it deals with. Thus, industrial
relations processes and outcomes are determined by a continuously evolving interaction of
environmental pressures and organizational responses (Khakheli& Morchiladze, 2015). The
relative importance of either the environment or the parties' responses can vary over time.
Therefore, labor- or product market changes do not have independent effect or operate in a
unique or deterministic fashion. Then, choice and discretion on the part of labor, management,
and government affect the course and structure of industrial relations systems. Moreover,
history plays an extremely important role in shaping the range of feasible strategic adaptations.
A three-tier framework helps identify an important development that existing industrial
relations systems theory does not specifically address: the apparent inconsistencies and
internal contradictions in strategies and practices occurring at different levels of industrial
relations within firms. First, this framework recognizes the inter-relationships among activities at
the different levels of the system and helps explain the origins of any prevailing internal
contradictions or inconsistencies among three levels. Second, this framework considers the
effects that various strategic decisions exert on the different actors in the system. The three-tier
framework encourages analysis of the roles that labor, management, and government play in
each other's domain and activities. The Strategic choice theory can be used guide the study in
understanding how decisions made by the top management of construction firms are translated
to strategy at all levels especially the shop level where they are executed.

EMPIRICAL REVIEW
This section puts into perspective a review of past empirical studies on strategic decision
making practices and performance particularly in construction firms. In particular, past studies
on advocacy decision making practices and dialogic decision making practices in context of
organizational performance are reviewed.

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Advocacy Decision Making Practices and Organizational Performance

Advocacy decision making is where participants approach decision making as an event and a
contest (Dumler & Skinner, 2007). Advocacy tends to be a closed process that focuses on a
single alternative. Characteristics of the advocacy approach include: Hard “selling” of a project;
Trying to win the case (like an attorney); No alternatives offered; instead a „go‟ or „no go‟
decision on one option is forced; Arguing the positives of the solution while downplaying the
negatives; Making a compelling case and winning approval. The pitfalls of the advocacy
approach are many and include: Reliance on one option precludes the chance to explore
multiple solution alternatives; Disagreements can grow fractious and even antagonistic;
Personalities and egos come into play and differences are resolved through battles of will and
behind-the-scenes maneuvering; Each decision will inevitably produce winners and losers; The
losers, to the extent they can, will continue fighting the decision long into the execution phase.
This increases decision cycle time – the total time from the point a decision process begins to
the time where the final decision is not only made, but fully executed and the benefits realized.
The advocacy approach produces interpersonal conflict, which manifests itself in personal
friction, rivalries and clashing personalities (Ehrgott, 2011).
The devil's advocacy decision-making technique is where an individual is allowed to
become the critic in the proposed decision, that is, to contest a decision with the aim of bringing
out its merits before it is adopted. The devil's advocate role is to ensure that the company does
not make an expensive mistake and uncover any potential flaws with the options. According to
Mui (2014), the devil‟s advocacy, a technique for improving the quality of group decisions,
introduces conflict into the decision-making process. The role of the devil's advocate is to cause
discussion on the alternatives and point out any flaws or risks. For example, a design team is in
total agreement that all choices will be amazing. The devil's advocate has provided a summary
of the choices pointing out all of the issues. The service that the devil's advocate will provide will
lead to a high-quality decision (Payneet al., 2003). The devil's advocate technique will also help
eliminate any potential future issues or problems.
Janis suggests that this concept is an antidote for groupthink. Earlier, we noted that
groupthink results in inhibitions and premature conformity to group norms. Devil‟s advocacy can
nullify these and other group‟s phenomena to which group members are subjected. After a
planning group has developed alternative solutions to a problem, the plan is given to one or
more staff members, with instructions to find fault with it (Ehrgott, 2011). If the plan withstands
the scrutiny of the devil‟s advocates, it can be presumed to be free of the effects of groupthink
and thus viable (Corey, 2011). This procedure helps organizations avoid costly mistakes in
decision making by identifying potential pitfalls in advance (Crosier & Schwenk, 2010). For

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example, a construction design team proposes certain ideas about a forthcoming project that
are quite convincing, although the design team agrees that the ideas are really cool, the devil's
advocate points out the risks involved in each. This technique helps prevent groupthink and
increases the chance of a high-quality decision. The biggest strength to using the devil's
advocate technique is the ability to prevent groupthink, which is where members try to eliminate
discord and agree on a decision even though it might not be the best alternative.
There are many potential disadvantages to group decision-making. Groups are generally
slower to arrive at decisions than individuals, so sometimes it is difficult to utilize them in
situations where decisions must be made very quickly. One of the most often cited problems is
groupthink. Irving Janis, in his 1972 book Victims of Groupthink, defined the phenomenon as the
"deterioration of mental efficiency, reality testing, and moral judgment resulting from in-group
pressure." Groupthink occurs when individuals in a group feel pressure to conform to what
seems to be the dominant view in the group (Corey, 2011). Dissenting views of the majority
opinion are suppressed and alternative courses of action are not fully explored.
Research suggests that certain characteristics of groups contribute to groupthink. In the
first place, if the group does not have an agreed upon process for developing and evaluating
alternatives, it is possible that an incomplete set of alternatives will be considered and that
different courses of action will not be fully explored. Many of the formal decision-making
processes (e.g., nominal group technique and brain-storming) are designed, in part, to reduce
the potential for groupthink by ensuring that group members offer and consider a large number
of decision alternatives (Crosier & Schwenk, 2010). Secondly, if a powerful leader dominates
the group, other group members may quickly conform to the dominant view. Additionally, if the
group is under stress and/or time pressure, groupthink may occur. Finally, studies suggest that
highly cohesive groups are more susceptible to groupthink. Group polarization is another
potential disadvantage of group decision-making. This is the tendency of the group to converge
on more extreme solutions to a problem. The "risky shift" phenomenon is an example of
polarization; it occurs when the group decision is a riskier one than any of the group members
would have made individually (Corey, 2011). This may result because individuals in a group
sometimes do not feel as much responsibility and accountability for the actions of the group as
they would if they were making the decision alone.
Although devil‟s advocacy can be used as a critiquing technique after alternative
solutions to a problem have been developed, it can also be used during the early stages of the
decision-making process. For example, during a decision - making session one member could
be assigned the role of devil‟s advocate, expressing as many objections to each alternative
solution to a problem as possible (Schweiger & Finger, 1984). Furthermore, it is a good idea to

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rotate the job of devil‟s advocate so that no single person or group develops a strictly negative
reputation. Moreover, periodic devil‟s advocacy role-playing is a good training technique for
developing analytical and communication skills, as well as emotional intelligence (Kreitner &
Kinicki, 2010). Other method s used by organizations to prevent group think include rotating in
new group members, inviting attendance by outsiders, and announcing a temporary delay
before the final decision is made to give organization members one last chance to identify and
express their reservations (Newstrom, 2011).Numerous organizations use some form of devil‟s
advocacy (Ivancevich, Konopaske, & Matteson, 2011).
Mui (2014) points out that it is important to commit to an explicit process rather than
hope that tough questions will spontaneously emerge, and that has to be done at the beginning.
Everyone has to agree on when a devil‟s advocate will be involved, whether insiders or
outsiders will play the role, and how the role will play out. If the organization waits until it is in the
heat of a moment, when a critical decision is being made on a real, live innovation program,
everyone will have chosen sides. Those who want the idea to proceed will resist a devil‟s
advocate, for fear it will slow or kill the project. Those who oppose the idea will insist on a devil‟s
advocate. Both sides will try to tilt the playing field in their favor. The only way to get everyone
on board is to set the rules before anyone knows whether they‟re for or against a particular
project. The processes have to be specified in detail, too. As things stand, many companies like
the theory of devil‟s advocacy but never implement it.

Dialogic Decision Making Practices and Organizational Performance

Dialogic decision making or inquiry is a very open process designed to generate multiple
alternatives, foster the exchange of ideas and produce a well-tested solution. Successful
leaders know the preferred way to manage important decisions are the inquiry approach.
Groups that employ the inquiry method consider a variety of options and work together to
discover the best solution. While people naturally continue to have their own interests, the goal
is not to persuade the group to adopt a given point-of-view, but instead to come to agreement
on the best course of action (Postmes, Spears & Cihangir, 2001). Rather than suppressing
dissension, an inquiry process encourages critical thinking.
Characteristics of the inquiry approach include: Framing decision objectives to create
multiple solution possibilities; Making assumptions visible; Generating multiple alternatives;
Evaluating each feasible alternative using appropriate analytical tools; Collaborating with others
to work through differences of ideas, concepts and assumptions; Finding the best solution. The
clear advantage of the inquiry approach is that it produces decisions of higher quality –
decisions that not only advance the company‟s objectives but also are reached in a timely

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manner and can be implemented effectively. However, this approach requires a commitment
from the leader and a discipline for managing the process (Krapohl, 2009).
There are several “indicators” that leaders can assess to determine if they are on the
right track: Multiple alternatives – when many alternatives are considered, teams engage in
more critical analysis and thought; Assumption testing – any method which makes assumptions
visible is a superior approach. It helps the team confirm or challenge the assumptions, and act
accordingly; Well defined criteria – this makes competing concepts, arguments and alternatives
much easier to judge objectively; Dissent and debate – an inquiry based process facilitates
cognitive conflict, where the goal is to express differences openly and challenge underlying
assumptions, introduce new ideas and explore alternatives; Perceived fairness - this is the
“procedural justice” in the decision process (Krapohl, 2009). If team members believe their
views were listened to and considered – that they had an opportunity to influence the final
decision, and that the process was fair, they are far more willing to commit to the outcome even
if their views did not prevail.
While inquiry is an ideal, it is seldom met in practice. It is extremely difficult for
individuals to discuss ideas or issues without expressing their opinions. A more realistic and
effective technique for arriving at a decision is one that balances advocacy with inquiry. Group
members leave their personal agendas behind and enter the meeting with the intention of acting
as unbiased participants (Hendrickse, 2008). They may advocate for a position they feel
strongly about, but they also inquire into other viewpoints and consider alternatives (Brown,
2004). They understand that the goal is to find the best solution for the group as a whole, even if
it means that some individuals in the group might be negatively impacted by the decision.
Generally, in well-balanced sessions, people share information freely and consider multiple
alternatives.

Performance of Organizations
Rana, Arfan and Majid (2012) carried out a study on the impact of manager decision making
styles on organizational performance in Pakistan. Study also investigated the moderating role of
emotional intelligence on the relationship among decision making styles and organizational
performance. Data was collected on random sampling basis from 187 banking sector
employees. The findings of the study revealed that employee‟s different decision making styles
influenced organizational performance differently. The major findings of the study were that
rational and dependent decision making styles have high positive impact on organizational
performance while avoidant decision making styles has negative impact on organizational

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performance. Study further determines that emotional intelligence moderates the relationship
among decision making styles and organizational performance.
A study by Al Shra'ah (2015) found that organizational learning determines how a firm
acquires, assimilates and exploits internal and external knowledge. The results of study also
explained that the flexible and integrative DM styles facilitate the organizational learning
through: The generation of new knowledge achieved through participation in decision making
processes; The accumulation of knowledge gained through involvement and implementation of
decisions; Participation in decision making processes prepares the transferring of new
developments in science and technology; Participation in decision making processes improves
leadership styles and capacities; The flexible and integrative DM styles facilitate horizontal
and/or vertical forms of interaction among leaders in organizations through decision making
processes. This means that an organizational learning is improving and building up through
these two styles; Decision making is a tool of training of future leaders. Accordingly, the leaders'
mentality is the strategic approach of survive and growth; and Organizational culture as a
framework of learning processes forms the decision making styles. The study also explained
that the decisive and hierarchic DM styles positively affect the organizational learning. However,
these two styles decelerate the improvement of organizational learning. The decisive and
hierarchic DM styles constrain the continuous improvement and innovation.
A study by Eisenfuhr (2011) indicated that decision speed is positively related to firm‟s
performance. Khakheli and Morchiladze (2015) found that firm‟s performance is negatively
related to the extent of politicization of the decision -making process. In their study of
organizational performance, Papadakis et al. (1998) suggested that return on asset is positively
related to the extent of rationality/comprehensiveness and hierarchical decentralization in the
decision-making process. This is in line with the results presented by Khakheli and Morchiladze
(2015),who suggested that in high velocity environments, the greater the delegation the better
the performance of the firm and also with that of Dean and Sharfman (1996) who found a
positive relationship between decision-making effectiveness and the extent of rationality in the
decision-making process but at the same time contradicts with some literature that found a
negative relationship between firm‟s performance and the extent of comprehensiveness in the
decision-making process in unstable environment.
Organization slack, defined as a cushion of resources, helps organizations cope with
environmental changes and unexpected events. In my literature review I could not find any
empirical study relating slack to strategic decision-making process except the work of Sharfman
and Dean (1997) that concluded a positive relationship between slack and flexibility in strategic

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decision-making process and Nooraie (2007) who found positive relationship between
organizational slack and the level of rationality in the strategic decision-making process.

Conceptual Framework
The study conceptualized in a conceptual framework is presented in a schematic interpretation
explaining the relationship between the study variables. Figure 1 shows the perceived
relationship between the independent and dependent variables.

Figure 1: Conceptual Framework

Advocacy Decision Making

Practices
 Individual decisions
 Group decisions
 Decision making team Organizational
 Independent decision Performance
making  Service
delivery
 Efficiency
 Profitability
Dialogic Decision Making  Performance
Practices evaluation
 Consultation
 Viable alternatives
 Free thinking
 Decision making
approaches


Independent Variables Dependent Variable

Figure 1 shows the relationship between the independent variables and the dependent variable.
In this study, certain variables describing the strategic decision making practices constituted the
independent variables. The independent variables included advocacy decision making practices
and dialogic decision making practices. Organizational performance was the dependent
variable. It was presumed that the stated decision making practices influence performance of
construction firms.

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METHODOLOGY
Research Design
This research study employed descriptive survey design. According to Kombo and Tromp
(2006) the major purpose of descriptive research is to describe the state of affairs as it exists. It
is a method of collecting information by interviewing or administering a questionnaire to a
sample of individuals. A survey design involves asking a large group of respondents‟ questions
about a particular issue (Mugenda & Mugenda, 2009). This design was chosen for the study
because it is an effective method of collecting descriptive data regarding characteristic of a
sample of population, current practices, conditions or needs over a wide area. The design was
also appropriate because it enabled assessing the opinions and attitude on events of people
and procedures. Therefore it was used to obtain from as many respondents as possible in the
study area.

Target Population
The target population refers to members of a real or hypothetical people to whom a researcher
wishes to generalize the results of the study (Gall, Borg & Gall, 2003). The target population of
this study, therefore, comprised of management staff of construction firms in Kenya. The study
(accessible) population which refers to the population that a researcher can access and is a
subset of the target population constitutes the 936 management staff of 312 construction firms
that are duly registered and active in Nakuru town. According to the County Government of
Nakuru Register (2015), there were312 such registered construction firms by the time the study
was conducted.

Sample Size
A sample is a smaller group obtained from the accessible population and each member has
equal chance of being selected to be a sample. It is also a finite part of a statistical population
about the whole (Mugenda & Mugenda, 2009).The sample size wascalculated using the formula
by Nassiuma (2008) as follows.
𝑁𝑐 2
𝑛=
𝑐 2 + (𝑁 − 1)𝑒 2

Where,
n = sample size, N = population size, C = coefficient of variation (21≤C≤30%), and e = error
margin (2≤e≤5%). In this study C was taken as 25%, e to be 3% and N = 936.

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Therefore, fitting this into the formula:

n= 936× 0.252
0.252 + (936 – 1) 0.032
n= 64.71
n= 65 respondents
The right sample size obtained from the above formula was thus 65 respondents.

Sampling Technique
The study used stratified random sampling method to sample the management and general
staff of the construction firms in Nakuru town. The stratified sample not only represented the
overall population, but also key subgroups of the population. The study population was stratified
as shown in Table 1.

Table 1. Distribution of Study and Sample Populations

Respondent N n

Management staff 312 22

Supervisory Staff 624 43

Total 936 65

Research Instrument
The study used primary data which were collected directly from the respondents using self-
administered questionnaires. Questionnaire contained closed ended questions. It has quite a
number of advantages which include: confidentiality; time saving; and reduced interviewer bias.
Questionnaires also have the advantages of low cost, easy access, physical touch to widely
dispersed samples (Fowler, 1993) and also the fact that the results are quantifiable. However,
the use of questionnaires requires careful preparation as it could easily confuse the
respondents, or discourage them, or simply fail to capture important information needed in the
study (Mugenda & Mugenda, 2009). This enabled the researcher to reduce both researcher and
respondent biases.

Pilot Testing
The researcher administered the questionnaires to the actual respondents after pilot testing
them for correctness and accuracy on 10 non-participatory respondent sample. Piloting was
done amongst the management and supervisory staff of construction firms in Naivashatown.

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Instrument Validity
Validity is the accuracy and meaningfulness of inferences, which are based on the results. It is a
measure of how well a test measures what it is supposed to measure. It is concerned with the
accurate representation of the variables under study. It is influenced by systematic error in data.
The study adopted content validity to show whether the test items represent the constructs and
contents that the instrument is designed to measure (Mugenda & Mugenda, 2009). In order to
ensure that all the items used in the questionnaires are consistent and valid, the instruments
were subjected to scrutiny and review by the assigned university supervisor. The items were
rephrased and modified to avoid ambiguity before being used for data collection.

Instrument Reliability
Reliability is the measure of the consistency of the results from the tests of the instruments. It is
a measure of the degree to which a research instrument yields consistent results or data after
repeated trials. Internal consistency method was employed by the study to check the reliability
of the research instruments. This was done by calculating the Cronbach‟s alpha coefficient for
all the variables of the study. According to Cronbach and Azuma (1962) a value of the
Cronbach‟s alpha coefficient above 0.7 shows high internal consistency and thus deemed
acceptable for study purposes. All the four study variables namely advocacy decision making
practices, dialogic decision making practices, decision analysis practices and performance
returned alpha coefficients greater than 0.7 and were as such considered reliable.

Data Collection Procedure

Both for legal and ethical considerations, the researcher will obtain a permit before embarking
on the actual study. Permission to conduct this research will be obtained from the relevant
authorities and targeted construction firms in advance. Care will be taken to ensure that the data
is scored correctly, and systematic observations made. Primary data will be collected mainly
utilizing quantitative and qualitative methods to obtain in depth information of the study
variables. Every respondent will be approached through the management separately and
handed the questionnaires to fill in his own time. The questionnaires will then be collected at a
later date specified to the respondents.

Data Processing and Analysis

After retrieving the questionnaires from the respondents, the questionnaires will first be sorted
and the data in them edited and then coded before being entered into the computer software,
Statistical Package for Social Sciences (SPSS) version 24 for analysis. The data will then be

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analyzed using both descriptive and inferential statistical methods. The descriptive statistics
which involves the use of frequencies and percentages will be used in the analysis to provide
the basic characteristics of the data and central tendencies will be in form of meanwhile
variation will be determined using standard deviation. Inferential statistics involving the use of
correlation and multiple regression models will be used to determine the nature of the
relationship between the variables. The following multiple regression model will be adopted.
Y = β0 + β1X1 + β2X2 + ε
Where;
Y represents Performance
X1 represents Advocacy Decision Making Practices
X2 represents Dialogic Decision Making Practices
β1, β2, represents Regression Coefficients of Independent Variables
ε represents Estimated Error of the Regression Model

FINDINGS AND DISCUSSIONS

Response Rate
The study involved a sample of 65 management and supervisory staff working with construction
firms in Nakuru town. This implied that a total of 65 questionnaires were issued to the
aforementioned respondents. Sixty-four questionnaires were filled and collected from the
respondents. This was equivalent to 98.5% response rate. The very high response rate where
only one respondent failed to return the filled questionnaire was founded on the fact that the
questionnaires were administered by the researcher in person and explained to the respondents
the importance of their participating in the study.

Descriptive Analysis
The descriptive findings in this section are presented in form of means and standard deviations.
This is due to the fact that the data collected was categorical and on a Likert scale. The scale
used had the values 1 to 5 representing level of agreement from strongly disagree to strongly
agree. The findings relate to advocacy decision making practices, dialogic decision making
practices, decision analysis practices and performance of construction firms.

Advocacy Decision Making Practices and Performance of Construction Firms

The sampled managers and supervisors were asked to opine on issues regarding advocacy
decision making practices in their respective firms. The results are displayed in Table 2.

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Table 2: Descriptive Statistics for Advocacy Decision Making Practices

Std.
n Min Max Mean Dev

Most of our firm's decisions are made by individuals 64 1 5 4.52 0.959

Most of our firm's decisions are made using a group of selected

persons 64 1 5 3.73 1.225

We have a tendency of pushing through with a decision in our firm

regardless of the outcome 64 1 5 3.98 1.120

We often assign one member of the decision making team the role of
criticizing every decision in order to assess its merits 64 2 5 3.98 0.968

We try to encourage more independence in groups as opposed to

group thinking 64 1 5 3.91 1.080

Decision-makers are voluntarily selected 64 2 5 4.00 0.976

All decisions in our firm are made with the consent of all stakeholders 64 1 5 3.97 1.140

The study observed that respondents were in agreement (mean ≈ 4.00; Std Dev ≈ 1.000) that
most of the firm's decisions were made by individuals and also by a group of selected persons.
Furthermore, respondents agreed (mean = 3.98; Std Dev = 1.120) that decision makers had a
tendency of pushing through with decisions in the firms regardless of the outcome. It was also
agreed (mean = 3.98; Std Dev = 0.968) that decision makers assigned one member of the
decision making team the role of criticizing every decision in order to assess its merits. In
addition, respondents concurred (mean ≈ 4.00; Std Dev ≈ 1.000) that decision makers were
voluntarily selected and that all decisions in the firm were made with the consent of all
stakeholders.
Respondents were also in agreement (mean = 3.91; Std Dev = 1.080) that
independence of groups in decision making was encouraged as opposed to group thinking.

Dialogic Decision Making Practices and Performance of construction firms

In addition, the study assessed the respondents‟ views concerning dialogic decision making
practices in construction firms that they worked with. Table 3 shows the relevant findings.

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Table 3: Descriptive Statistics for Dialogic Decision Making Practices

Std.
n Min Max Mean Dev

We often present proposals for a major decision in our firm and let every
decision maker go through it first 64 3 5 4.50 0.617

Strategic decisions in our firm are made after extensive consultation within
the organization 64 2 5 4.06 1.233

We ensure that for every decision there is a viable alternative 64 2 5 4.22 0.899

We encourage free thinking in decision making at the firm 64 1 5 4.09 1.109

We often seek to balance our inquiry approach with other decision making
approaches 64 2 5 3.97 0.959

Opinions of all parties in the organization are equally factored in decision

making 64 1 5 3.66 1.371

Managers' opinions override views of other employees in decision making 64 1 5 3.14 1.468

The findings of the study as shown in Table 3 indicated that respondents strongly admitted
(mean =4.50; Std Dev = 0.617) that decision makers present proposals for major decisions in
the firm and let every decision maker go through it first. It was also Sobserved that respondents
concurred (mean ≈ 4.00; Std Dev< 1.000) that decision makers ensured that for every decision
there was a viable alternative and that the decision makers sought to balance the inquiry
approach with other decision making approaches in the firm. In addition, respondents were in
concurrence (mean = 4.09; Std Dev = 1.109) that free thinking in decision making in
construction firms was encouraged. Furthermore, it was agreed (mean ≈ 4.00; Std Dev> 1.000)
that strategic decisions in construction firms were made after extensive consultation within the
organization and that opinions of all parties in the organization were equally factored in decision
making. Respondents were, however, not sure (mean = 3.14; Std Dev = 1.468) whether
managers' opinions overrode views of other employees in decision making. It is evident that
construction firms in Nakuru town largely made decisions based on dialogue between the
concerned decision makers and stakeholders as supported by the respondents. This was
perhaps because of inclusiveness of all concerned stakeholders in decision making.

Performance of construction firms

Respondents further gave their views on performance of construction firms that they worked
with. Their opinions are summarized in Table 4.

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Table 4: Descriptive Statistics for Performance of Construction Firms

Std.
n Min Max Mean Dev

We are experiencing better service delivery as a result of training in

decision making 64 4 5 4.62 0.488

Our efficiencies have improved as a result of our decision making

approaches 64 1 5 4.48 0.908

We have been able to predict performance well ahead of time and make
all necessary contingency arrangements 64 1 5 4.27 1.144

Our analysis have enabled us to avoid making costly mistakes 64 3 5 4.56 0.639

Our ventures are more profitable nowadays compared to the past due to
enhanced decision making 64 1 5 4.37 1.000

We are able to measure and track performance easily 64 1 5 4.37 1.031

Our firm has been recording increased return on investment 64 3 5 4.58 0.638

Our firm has been recording increased return on assets 64 2 5 4.53 0.712

In relation to performance of construction firms and as shown in Table 4, respondents strongly

concurred (mean ≈ 5.00; Std Dev< 1.000) that the firms have been experiencing better service
delivery as a result of training in decision making and that they have been recording increased
return on investment. Respondents were also in agreement (mean ≈ 4.00; Std Dev> 1.000) that
construction firms were able to predict performance well ahead of time and make all necessary
contingency arrangements, and that the firms were also able to easily measure and track
performance.
The study participants, furthermore, admitted (mean ≈ 4.00; Std Dev< 1.000) that the
firms‟ efficiencies have improved as a result of decision making approaches and that those firms
have been recording increased return on assets. It was also concurred (mean = 4.56; Std Dev =
0.639) that decision makers‟ analyses have enabled the firm to avoid making costly mistakes. In
addition, respondents admitted (mean = 4.37; Std Dev = 1.000) that the firms‟ ventures were
more presently profitable compared to the past due to enhanced decision making. It was
observed that construction firms in Nakuru town have registered improved efficiency, service
delivery and overall performance in the recent past. This could be attributed to quality decisions
and strategies implemented by the construction firms.

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Relationship between Advocacy Decision Making Practices and Performance

The study evaluated the relationship between advocacy decision making practices and
performance of construction firms in Nakuru town. The relationship is indicated in Table 5 and
further explained.

Table 5: Correlation between Advocacy Decision Making Practices and Performance

Performance
**
Advocacy Decision Making Pearson Correlation 0.505
Practices Sig. (2-tailed) 0.000

n 64

**. Correlation is significant at the 0.01 level (2-tailed).

The relationship between advocacy decision making and performance of construction firms was
found to be positive, moderately strong and statistically significant (r = 0.505; p < 0.01) at 0.01
significance level. The results were interpreted to mean that the more the construction firms
embraced advocacy decision making practices the greater their performance could be
enhanced. It was observed that focusing on a single viable option carefully scrutinized by a
decision maker during decision making process, followed by its implementation enhanced
performance of construction firms.

Relationship between Dialogic Decision Making Practices and Performance

The construct of dialogic decision making practices was correlated against performance of
construction firms in order to assess the direction, strength and significance of the relationship
between the two study variables.

Table 5: Correlation between Dialogic Decision Making Practices and Performance

Performance
**
Dialogic Decision Making Practices Pearson Correlation 0.738

Sig. (2-tailed) 0.000

n 64

**. Correlation is significant at the 0.01 level (2-tailed).

According to the findings indicated in Table 5, it was noted that there existed a positive,
moderately strong and statistically significant relationship between dialogic decision making and

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performance of construction firms in Nakuru town (r = 0.738; p < 0.01). This meant that as
construction firms adopted more dialogic decision making practices the greater the likelihood
that the performance of those firms could be improved. Decisions made through extensive
dialogue with all stakeholders, free thinking, weighing up of alternatives or options in the
construction firms was noted to enhance the performance of the firms. Dialogic decision making
was observed to be fundamental in the performance of the firms.

Regression Analysis
Multiple regression analysis was employed in this section to determine the extent to which the
various decision making practices under study (advocacy decision making practices, dialogic
decision making practices and decision analysis practices) influenced performance of
construction firms in Nakuru town, Kenya. The study examined the influence of strategic
decision making practices, as characterized by advocacy decision making practices, dialogic
decision making practices, decision analysis practices, on performance of construction firms by
using multiple regression analysis. The results of the study as depicted in Tables 6, 7 and 8 are
in form of correlation (R), coefficient of determination (r 2), analysis of variance (ANOVA) and
regression coefficients respectively.

Table 6: Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate
a
1 0.805 0.648 0.631 0.32940

a. Predictors: (Constant), Advocacy Decision Making Practices, Dialogic Decision Making

Practices

As indicated in Table 6, the relationship between strategic decision making practices and
performance of construction firms was found to be positive and strong (R = 0.805). This implied
that as construction firms embraced more strategic decision making practices their performance
was likely to be improved.
It was also noted that 63.1% variation in performance of construction firms (as indicated
2
by r = 0.631) could be explained by strategic decision making practices. These results
emphasized the importance of strategic decision making practices in performance of
construction firms in Nakuru town.

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Table 7: ANOVAb
Model Sum of Squares df Mean Square F Sig.
a
1 Regression 11.995 3 3.998 36.851 0.000

Residual 6.510 60 0.109

Total 18.506 63

a. Predictors: (Constant), Advocacy Decision Making Practices, Dialogic Decision Making

Practices
b. Dependent Variable: Performance of Construction Firms

According to the findings illustrated in Table 7, ANOVA results, the association between
strategic decision making practices and performance of construction firms was observed to be
positive and statistically significant (F = 36.851; p < 0.01). This implied that strategic decision
making practices (advocacy decision making practices and dialogic decision making practices)
were crucial to performance of construction firms.

Table 8: Coefficientsa
Unstandardized Standardized
Coefficients Coefficients

Model B Std. Error Beta t Sig.

1 (Constant) 0.933 0.381 2.450 0.017

Advocacy Decision Making

Practices 0.052 0.093 0.052 0.554 0.582

Dialogic Decision Making

Practices 0.374 0.085 0.453 4.379 0.000

a. Dependent Variable: Performance of Construction Firms

The findings illustrated in Table 8 are in tandem with the following regression model.
Y = β0 + β1X1 + β2X2 + ε
The above model is explained as follows.
Y = 0.933 + 0.052X1 + 0.374X2

The results captured by the model above imply that increasing advocacy decision making
practices and dialogic decision making practices by 0.052 unit and 0.374 unit respectively while
holding other factors (0.933) constant would result in an increase of performance of construction

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firms in Nakuru town by a single unit. The regression coefficient results shown in Table 8 further
revealed that the influence of strategic decision making practices on performance of
construction firms was positive and statistically significant (t = 2.450; p < 0.05). Particularly, the
influence of dialogic decision making practices on performance of construction firms was
established to be significant (t = 4.379; p < 0.05). Therefore, the second null hypothesis was
rejected. Advocacy decision making practices, however, did not significantly influence
performance of construction firms (t = 0.554; p > 0.05). As such, the first null hypothesis failed to
be rejected. It was observed that dialogic decision making practices were the most crucial
elements of strategic decision making practices in as far as performance of construction firms in
Nakuru town were concerned.

Hypotheses Testing
Testing the First Null Hypothesis (H01)
i. H01: Advocacy decision making practices do not significantly influence performance of
construction firms in Nakuru town.
ii. Ha: Advocacy decision making practices significantly influence performance of
construction firms in Nakuru town.
iii. Hypothesis test results = (t = 0.554; p > 0.05).
iv. The null hypothesis failed to be rejected

Testing the Second Null Hypothesis (H02)

i. H02: Dialogic decision making practices do not significantly influence performance of
construction firms in Nakuru town.
ii. Ha: Dialogic decision making practices significantly influence performance of
construction firms in Nakuru town
iii. Hypothesis test results = (t = 4.379; p < 0.05).
iv. The null hypothesis was rejected

Summary
The study found that most of the construction firms‟ decisions were made by individuals and
also by a group of selected persons. It was also agreed that decision makers had a tendency of
pushing through with a decision in the firm regardless of the outcome. Furthermore,
respondents the study revealed that decision makers assigned one member of the decision
making team the role of criticizing every decision in order to assess its merits. In addition, it was
found that decision makers were voluntarily selected and that all decisions in the firm were

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made with the consent of all stakeholders. It was further revealed that independence of groups
in decision making was encouraged as opposed to group thinking. The relationship between
advocacy decision making and performance of construction firms was positive, moderately
strong and statistically significant.
It was strongly admitted that decision makers presented proposals for a major decision
in the firm and let every decision maker go through it first. The study also observed that decision
makers ensured that for every decision there was a viable alternative and that the decision
makers sought to balance the inquiry approach with other decision making approaches in the
firm. In addition, it was noted that free thinking in decision making in the firm was encouraged.
Furthermore, it was agreed that strategic decisions in the firm were made after extensive
consultation within the organization and that opinions of all parties in the organization were
equally factored in decision making. It was not clear whether or not managers' opinions
overrode views of other employees in decision making. Further analysis indicated that there
existed a positive, moderately strong and statistically significant relationship between dialogic
decision making and performance of construction firms in Nakuru town.

CONCLUSIONS
The study concluded that construction firms in Nakuru town used advocacy decision making
where firms pushed through with a decision regardless of the outcome. Advocacy decision
making practices can be dangerous to a firm especially where alternatives are not sought or
where a decision made by one person is accepted without proper critical analysis. The findings
concurred with the observation by Dumler and Skinner (2007) that advocacy tends to be a
closed process that focuses on a single alternative. The authors further observed that advocacy
decision making practices are associated with personalities and egos coming into play and
differences being resolved through battles of will and behind-the-scenes maneuvering.
However, the study inferred that advocacy decision making enhanced performance of
construction firms in Nakuru town though the influence was largely inconsiderable.
Dialogic decision making practices ensure that proposals are scrutinized by all decision
makers, there are adequate and viable options to every decision made and that there are
adequate consultations with concerned stakeholders before the final decision is made. The
foregoing findings are in agreement with Brown‟s (2004) assertion that individuals may advocate
for a position they feel strongly about, but they also inquire into other viewpoints and consider
alternatives. Construction firms in Nakuru town were noted to largely use dialogic decision
making. The study inferred that dialogic decision making practices significantly influenced
performance of construction firms in Nakuru town. It therefore becomes important for the firms

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to strengthen their dialogic decisions making process in order to yield quality decisions that
improve performance of the firms.

RECOMMENDATIONS
There are a number of recommendations that were put forward in respect of strategic decision
making strategies and performance of construction firms. Firms are driven forward by the
decisions and strategies adopted. The decisions can determine performance or even growth of
the firms. It is recommended that where construction firms use advocacy decision making where
a single option is selected, the option should be analyzed by all decision makers and
stakeholders in order to assess its viability. Decisions and strategies made should be based on
their sustainability, competitiveness and productivity.
Construction firms and other firms in general are advised to consider the opinions of all
interested parties prior to arriving at decisions that are bound to have strategic effects on the
operations of those firms. The foregoing is likely to avoid conflict among stakeholders and in
particularly the implementers of decisions made and also the parties that are targeted to be
impacted by those decisions. Dialogic decision making practices are important in mitigating any
kind of resistant from sections of implementers of strategic decisions.

LIMITATIONS
The study was prone to a number of challenges. There are many registered construction firms
in Nakuru town which operated briefcase business which implies that they did not have physical
premises. This translated to increased difficulties in accessing the management staff working
with these firms. To this effect, the researcher delimited the study to only the active construction
firms with physical workstations. Moreover, some of the targeted respondents were skeptical to
participate in the study. Relative to this challenge, they were assured that the study was for
academic purpose and that the findings of the study would be shared with any interested party
upon request. Given that the study targeted the management staff working with construction
firms, is was quite hard to access them due to their relatively busy schedules. The researcher
addressed this limitation by making appointments with the respondents prior to physically
visiting their premises for data collection.

AREAS OF FURTHER RESEARCH

The study suggested various themes that ought to be investigated in Kenya in relation to
strategic decision making practices and performance of firms. A study on strategic decision
making practices and strategy implementation in large construction firms in Kenya should be

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carried out. In addition, an investigation should be carried out to establish the determinants of
performance of construction firms in Kenya. The role of management in enhancing organization
performance in construction companies should also be carried out in order to ascertain the
extent to which management contributes towards performance of the companies.

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